ADVERTISEMENT

Buffalo Place, the downtown business improvement organization that has managed concerts at Canalside, may have to downsize and narrow its focus to the city’s core if a financially viable agreement can’t be reached for the nonprofit group to continue running the shows at the waterfront, officials told the group’s board Wednesday.

Still stinging from a state agency’s decision early this month to bring in an out-of-town firm to take over management of Canalside, officials said Buffalo Place still wants to be involved in running the popular shows, which it pioneered more than 28 years ago in Lafayette Square. And it’s willing to do so as a subcontractor to the new firm.

But it can only do so if it won’t lose money and won’t jeopardize the rest of the organization, said Buffalo Place Chairman Keith Belanger, a senior vice president at M&T Bank Corp.

“It seems kind of reasonable to ask for something that doesn’t put us at undue risk,” he said after the Buffalo Place board meeting. “But if we can’t reach some reasonable agreement, we’ll wish them luck, we’ll hand them the baton – not our playbook – and we’ll move on.”

Two weeks ago, the Erie Canal Harbor Development Corp. selected Philadelphia-based Global Spectrum, a subsidiary of Comcast Spectacor, to operate, maintain and program Canalside for the next three years, in a contract valued at $1.7 million for just the first year. By contrast, last year, development group paid Buffalo Place $750,000.

The decision to award the contract – actually three separate bids – to Global Spectrum effectively replaces Buffalo Place, which was the only other entity to bid for all three contracts issued last fall by the waterfront agency. Buffalo Place has handled those functions for the growing waterfront development area in the past but lost $200,000 producing the concerts the last two years because of bad weather and other factors.

The loss of the contract angered Buffalo Place officials, who felt they had created the concert series and had already demonstrated their ability – as a local nonprofit versus a for-profit company – to handle the tasks.

Nevertheless, immediately after the Jan. 13 Erie Canal Harbor Development Corp. board vote, representatives of Buffalo Place and Global Spectrum met over lunch to discuss whether the two could collaborate. Belanger noted that the development group has “assured the public” that there will be a concert series and encouraged cooperation.

“That’s what’s been drawing people to the waterfront, so it’s probably still pretty important to ECHDC,” Belanger said. “So to the extent that we can help Global Spectrum, and do it in a way that an organization that’s as lean and mean as we are isn’t financially hurt, we will.”

Four days after the vote, Belanger said, Buffalo Place submitted a proposal to run the concerts to Global Spectrum, which he said is reviewing it and preparing a counteroffer. The two organizations have already had some talks, and Global Spectrum’s response is expected in the next few days.

“We are optimistic that there can be a continued role for Buffalo Place at Canalside, and we understand that Global Spectrum and Buffalo Place are currently in discussions about what that role may be,” Erie Canal Harbor Development Corp. spokeswoman Laura Magee said in an emailed statement. “We are hopeful that those discussions will result in an agreement where Buffalo Place will continue as a valued partner at Canalside.”

However, Belanger said, there isn’t a lot of “wiggle room” for Buffalo Place financially if it’s going to be successful.

Already, the organization’s losses have wiped out its reserves, giving it a negative net worth of $118,000.

That would mean the organization is virtually insolvent, except that it still has “lots” of depreciated but useful assets and a steady income stream, Belanger said. He said the group’s leaders plan to meet in the next couple of weeks to talk about the future.

“We have too many other important missions in the downtown,” he said. “We’ll be a leaner, meaner, more focused organization. We just have to get to the point where we know what we’re doing.”

Under Buffalo Place’s proposal:

• The concerts would still feature Buffalo Place branding.

• Thursday at Canalside concerts would still be free, while Buffalo Place Rocks Canalside concerts would be paid events.

• Tight security would be maintained, because “all you need is one bad thing to happen and you can hurt all of downtown,” Belanger said.

• Buffalo Place would have more flexibility in scheduling concerts rather than having to commit to a firm schedule in January or February. Belanger said the organization has missed out on concert opportunities that came up later.

• Global Spectrum would guarantee that Buffalo Place would net at least $100,000 in profit from the series, which helps offset its other expenses. If the bottom line fell short, “they’d write a check,” Belanger said.

On the other hand, he said, the two entities would share in any excess gain over $100,000 – “a win-win for both.”

• The concerts and relationship with Buffalo Place would continue as long as Global Spectrum holds the main contract.

“We don’t want to produce the series in 2014 and essentially hand over our playbook and get booted out in 2015,” he said.

In anticipation of an agreement, Buffalo Place’s booking agent is already working on a tentative lineup, but “we’re not making any commitments,” Belanger said.

email: jepstein@buffnews.com